Shakey’s eyes P5.48B from Dec IPO at P15.58 /share

SHAKEY’S Pizza Asia Ventures Inc’s (SPAVI) is all set to conduct its initial public offering (IPO) of 352 million shares on December 15 after receiving the green light from the Philippine Stock Exchange (PSE).

SPAVI is set to offer up to 352 million primary and secondary shares, including 46 million shares in case of oversubscription, at a maximum price of P15.58 each. At this price, the company would be able to raise about P5.48 billion from the IPO.

In a notice on its website late Thursday, the PSE said the “approval of the initial public offering of SPAVI’s shares is subject to its compliance with all of the post-approval conditions and requirements of the exchange.”

But the stock may debut on the market below the company’s P15.58 guidance, according to Thomson Reuters publication IFR Asia. IFR Asia estimates SPAVI shares may debut at P10.70 to P11.26 each due to volatility in the equities market at the time of listing.

At this range, SPAVI may raise between P3.77 billion and P3.96 billion through the IPO.

The final price setting date is on November 28. The offer period is from December 2 to 8, and listing of SPAVI’s shares (ticker symbol PIZZA) on the PSE is set on December 15.

This will be the fourth and potentially the last IPO for 2016, after Golden Haven Memorial Park Inc’s P778 million IPO in June, Cemex Philippines Holdings Corp. in July (P25 billion), and Pilipinas Shell Petroleum Corp. last November 3 (P18.425 billion).

Deutsche Bank AG was appointed as the sole global coordinator and bookrunner for the SPAVI IPO, with BDO Capital and Investment Corp. and First Metro Investment Corp. as joint lead managers and underwriters. Evercore is acting as exclusive financial adviser to SPAVI.

More than 80 percent of the IPO proceeds will be used to repay debt while the rest will be spent for the expansion of its in-house commissary and for other potential acquisitions.

Shakey’s, recognized globally as the original pizza franchise in the US, was first established there in 1954 and is best known for “the pizza that started it all”. Shakey’s first opened in the Philippines in 1975 and is famous for its Thin Crust pizzas and its Chicken & Mojos.

SPAVI, which owns the rights to the Shakey’s trademark in the Philippines, has 177 stores nationwide as of end-June and has plans to add seven more stores before the end of the year.

SPAVI also plans to open 20 new stores next year in the greater Manila and provincial areas.

Formerly International Family Food Services Inc., SPAVI earlier announced a five-year expansion plan from 2016 to 2020 under which it earmarked P1.3 billion to put up at least 50 company owned stores and 30 franchised outlets. The plan is expected to raise store count to up to 250 branches by 2020.

Apart from the Philippines, the company also owns perpetual rights to the Shakey’s brand for the Middle East, Asia (excluding Japan and Malaysia), China, Australia, and Oceania region.

SPAVI is majority owned by the Po Family’s Century Pacific Group Inc. (CPGI), which is the parent company of listed tuna canner Century Pacific Food Inc. (CNPF).

Earlier this year, CPGI and GIC, Singapore’s sovereign wealth fund, partnered to acquire majority of the pizza business from the Prieto family, which still holds a minority stake in SPAVI.